Two weeks ago, Senators Herb Kohl (D-WI) and Chuck Grassley (R-IA), the original authors of the Physician Payments Sunshine Act (PPSA), called on the Centers for Medicare and Medicaid Services (CMS) to adopt rules to implement these transparency provisions in the Affordable Care Act (ACA) by June. CMS is currently considering more than 300 sets of public comments submitted in February on the agency’s proposed regulations. Hundreds of groups across all sectors in the health care system submitted recommendations, and now CMS is charged with issuing the final rules and setting a date for industry to begin tracking their payments to doctors and teaching hospitals. The statute requires that manufacturers of drugs, devices, biologics, or medical supplies, or their subsidiaries that sell product s in the United States, report to CMS most payments made to physicians and teaching hospitals, and that this information be disclosed on a public website by CMS.

Like the Senators, we campaigned for these important transparency provisions because we want to shed light on the full range of financial interactions between manufacturers of drug or device products, and the doctors or teaching hospitals. These interactions can undermine good prescribing, patient trust in doctors and affordable care. While we agree that some financial relationships between industry and doctors may not be problematic, or may even be appropriate, transparency will allow the public and policymakers to determine if they are or are not, once we can see all the facts.

The process for implementation of this important law has been complex process. Detailed regulations or “rules” must be promulgated, and CMS’s Office for Program Integrity was charged with writing these regulations by October 1, 2011, so that manufacturers could begin collecting data January 1, 2012. Unfortunately the October 1 deadline was missed, but CMS did issue a 22 page draft rule on December 16, 2011. CMS provided a thorough 94 page description of the rule, and asked stakeholders to comment on as many as 90 issues raised in the draft rules. Seventeen different stakeholder sectors responded with more than 300 sets of comments. Now we await the CMS decisions on the shape of the final rule, so that manufacturers can begin collecting the data.

The array of comments submitted showed consensus in some areas and sharp disagreement in others. To better understand what CMS is now wrestling with, our colleagues at The Pew Charitable Trusts analyzed all the submissions and summarized them by sector, along several important dimensions. Here are some of the results.

Clearly define “Nature of Payment” Categories
There was near universal consensus among all sectors that the “nature” of reported payments be clearly described under the 14 categories listed in the statute (e.g. gifts, consulting fees, education, research etc.). This point was made by consumer and beneficiary advocates; drug and device manufacturers; physician societies; universities and teaching hospitals; states and medical boards; healthcare providers; health IT companies; MedPac (the independent Congressional agency concerned with Medicare); and ACRE (Association of Clinical Researchers and Educators).

However, we opposed the CMS proposal to simply allow industry to use “dictionary definitions” for these terms because dictionary definitions are vague, overlapping, or contradictory, which would cause inconsistency and confusion in the reported information. Community Catalyst, Pew, and 14 other consumer groups and beneficiary advocates all recommended that they be clearly defined by CMS rules so that they would be non-overlapping and clear to the public. Along with Pew, we even proposed a set of detailed definitions for consideration by CMS.

Ensuring that the public website is user-friendly
CMS is required to disclose industry payments on a public, searchable website, where the information is easily aggregated and downloadable. Most consumer advocates urged CMS to make the website as consumer-friendly and easy to understand and navigate as possible. And some advocates urged CMS to ensure the data is usable for states and researchers. Health IT groups, the National Business Group on Health and the Association of Health Care Journalists also supported these concepts. Several sectors urged CMS to seek input from the public in the design of the website and to add information that would allow the public to better understand the reporting categories and their significance.

MedPac, the federal agency charged with helping to keep Medicare sustainable, urged CMS to assess if the annual aggregate amount of payments subject to delayed disclosure could be disclosed, in order “to help policymakers assess whether rules for delayed publication should be adjusted” to a shorter period. Under the statute, delayed public disclosure of up to four years is allowed for certain research payments, to protect the proprietary interests of industry. Both MedPac and Community Catalyst were also concerned that delayed disclosure could be overly broad, especially if applied to investigations on new uses of products. Delayed disclosure in this area could hide inappropriate payments to prescribers that facilitate unapproved “off- label” uses of drugs.

The big controversy: third party payments and Continuing Medical Education
One of the major areas of disagreement in the comments submitted concerns industry reporting of payments to doctors through third parties, especially CME related payments. Not surprising, since the statute and the CMS rules plug an important potential transparency loophole, by requiring reporting of most payments to doctors through third parties. We’ll address that controversy in an upcoming Postscript.

–Marcia Hams, Director of Prescription Access and Quality
–Wells Wilkinson, Director, Prescription Access Litigation Project

Yesterday, the American Medical Student Association (AMSA) released their 2011-2012 PharmFree Scorecard, now in its fifth iteration. The Scorecard evaluates conflict-of-interest policies at the 152 medical schools in the U.S. and Puerto Rico, as well as a number of affiliated academic medical centers. With growing consumer and government scrutiny of the relationships between doctors and pharmaceutical companies (see, e.g., ProPublica’s series Dollars for Docs and the Physician Payment Sunshine Act), the Scorecard takes a unique look at how well professional standards are being introduced to the next generation of doctors. We don’t doubt the importance of education about pharmaceutical interventions and treatments, but it is also important to learn to question the veracity of information presented at industry-funded events, and understand the pharmaceutical marketing machine before a doctor begins her practice.

The Scorecard assesses policies that seek to reduce drug industry influence on the educational and clinical environment in which physicians do their training—including bans or limits on industry provision of gifts, meals speaker’s bureaus and samples; on industry influence on medical education and drug purchases by hospitals; on drug reps’ access to clinical areas; and, disclosure of industry relationships. This year’s grades demonstrate that medical schools are taking important measures to control the interaction between students or faculty and the pharmaceutical industry. Twenty-eight schools received an A (28 percent), 74 schools received a B (49 percent), 15 schools received a C (10 percent), and 13 schools received a D (9 percent). That leaves 9 schools with an F, and 15 “In Progress” schools. Despite progress overall, challenges remain, especially with policies on disclosure of financial ties with industry, samples, and access by sales representatives.

There are 102 schools with As or Bs (two-thirds!), up from 79 in 2010 and 45 in 2009. Four schools significantly improved their scores and went from F grades last year to B grades – gold star! These schools are University of Texas Health Center at Houston, University of South Carolina, Howard University, and Morehouse School of Medicine. Five other schools improved by two letter grades or more: Eastern Virginia Medical School, University of Arizona College of Medicine, Midwestern University – AZCOM Arizona College of Osteopathic Medicine and CCOM (Chicago), University at Buffalo, and OU-COM Ohio University – College of Osteopathic Medicine. And although other schools made this particular improvement, it is nice to see that Harvard Medical School has improved from a B to an A. (Recall that in 2008 they started with a great big F.) Kudos to the leadership (and student activists) who helped Harvard institute some of the strongest policies in the country, including a ban on speakers’ bureaus and a strong gift, disclosure and samples policy.

“It’s gratifying to see the improvement of medical school grades on the AMSA scorecard. This reflects the importance that medical schools are placing on the highest principles of professionalism. The policies that medical schools adopt set the tone for the culture of the institution that instills the values of professionalism in the medical students, residents, and fellows who train there.”

Stephen R. Smith, M.D., M.P.H.
Professor Emeritus and Former Associate Dean for Medical Education
Warren Alpert Medical School of Brown University

We’ve come a long way since Brennan, Rothman and company published their seminal article in 2006 on conflicts of interest in academic medical centers and their impact on medical professionalism. To put those recommendations into practice, the Prescription Project was launched in 2007 at Community Catalyst, funded by Pew Charitable Trusts. In 2008, The Association of Academic Medical Centers (AAMC) stepped up with strong standards. For the last five years the AMSA Scorecard has served to keep everyone’s feet to the fire—while measuring steady progress and pointing to barriers that must still be overcome.

To look up any school and see all the details on what’s behind each grade, please visit http://www.amsascorecard.org/

Community Catalyst, AMSA, Pew Charitable Trusts and the National Physicians Alliance have now begun a new three year collaboration, The Partnership to Advance Conflict-Free Medical Education to address these issues at medical schools and AMCs. The initiative is made possible by a grant from the state Attorney General Consumer and Prescriber Education Grant Program, which is funded by the multi-state settlement of consumer fraud claims regarding the marketing of the prescription drug Neurontin.

–  Anna Dunbar-Hester,  Program Coordinator
Prescription Access & Quality

The American Medical Student Association (AMSA) will be releasing its fifth PharmFree Scorecard on Thursday, March 8. The PharmFree Scorecard measures how well academic medical institutions are doing at providing an educational (not promotional) environment in which medical students receive their education, by instituting policies to manage potential conflicts with the pharmaceutical industry.

The PharmFree Scorecard evaluates all 152 allopathic and osteopathic medical colleges in the United States and Puerto Rico. It measures 11 metrics, including curriculum, pharmaceutical sales rep access to students, and four metrics on gifts and industry relationships.

PostScript has been covering the Scorecard for four years now, and we are excited to analyze the latest results when they come out on Thursday. To get ready, we took a trip down memory lane:

• In 2008, only 7 schools received an A, and 14 received a B (out of 150 schools). 60 schools received an F.
• In 2009, 45 institutions received an A or B, and one-fifth of the schools improved their policies over the year before.
• In 2010, 78 schools received an A or B, representing one half of all medical schools. 19 schools were still receiving Fs, but that means 41 fewer failing schools than just two years prior.

We hope the race to the top continues!

The updated scorecard will be posted on Thursday at http://www.amsascorecard.org/.  If you’d like to be among the first to hear the results, you are welcome to join the press conference at 11am EST (8am PST) on Thursday:

Toll Free Access Number: 
(559) 726-1000
Participant Passcode:  161471#

Location:  
Hyatt Regency Houston
1200 Louisiana Street, Houston, Texas
Press must check in at AMSA registration desk

– Anna Dunbar-Hester, Policy Analyst

This blog post was made possible by a grant from the state Attorney General Consumer and Prescriber Education Grant Program which is funded by the multi-state settlement of consumer fraud claims regarding the marketing of the prescription drug Neurontin.

Community Catalyst and 18 other consumer, patient safety and labor groups weighed in last week in support of (with important “friendly amendments”) draft regulations issued by the Centers for Medicare and Medicaid Services (CMS) requiring that the drug, biologics and medical device industries publicly report all payments to physicians and teaching hospitals. See here and here. As a result, all of these industry payments will be displayed on a publicly available website, where the information can be viewed by patients, or downloaded and studied.

Over 300 organizations submitted comments on these “sunshine” provisions of the health reform law. That’s a surprising number of comments, given that the provision doesn’t affect a patient’s right to benefits, or set up a new program or regulate insurance. The provision simply requires transparency in virtually all drug and device industry payments to physicians and to the teaching hospitals that train doctors or host biomedical research. Such transparency is critical for patients and the health care system, because it can expose industry marketing that undermines good prescribing, trust in doctors and affordable care. As Senator Chuck Grassley, who long championed the bill with Senator Herb Kohl, said in 2009, “Transparency fosters accountability, and the public has a right to know about financial relationships. Patients rely on their doctors’ advice. Taxpayers spend billions every year on prescription drugs and medical devices through Medicare and Medicaid. They also fund tens of billions of dollars of medical research each year, and the doctors conducting that research have a big influence on the practice of medicine.”

This transparency program was slated to go into effect on January 1 of this year, but the Department of Health and Human Services and CMS have been behind on issuing the rules. All 18 consumer and labor groups urged that this transparency be started as soon as possible after the final rule is issued. There’s no legitimate reason to delay further, because the nation’s biggest drug makers have already been reporting their payments as a result of federal investigations or settlements of possible illegal kick-backs paid to doctors. And nearly all of these manufacturers have been reporting these payments to the States of Vermont, Minnesota and Massachusetts, under state transparency laws.

The proposed rules address many complicated issues. For instance, how any payment to a doctor is labeled, as a ‘gift’ or ‘consulting fee’ or a payment for ‘research,’ etc. We urged CMS to adopt clear-cut, non-overlapping definitions to ensure that all the information is accurate, understandable to the public, and not open to manipulation. We also applauded a number of CMS proposals to improve the public’s ability to understand what payments are for, such as separating ‘lump sum’ payments into smaller units. This will help prevent industry from trying to bury inappropriate payments for lavish meals or travel to fancy resorts within a larger payment for ‘education’ or ‘research.’

We also applauded CMS efforts to prevent loopholes, by including all drug and device manufacturers, regardless of whether their products are manufactured overseas, and by including payments made to doctors through third parties, where appropriate. Plugging these potential large loopholes is essential to real transparency.

Under the statute, research payments must be reported but can be delayed for four years to protect industry from competition during product development. However, we urged CMS to narrow the definitions so that payments related to research on new uses (such as ‘off-label’ uses) of drugs, biologicals and invasive implanted devises are not delayed. Numerous federal investigations and prosecutions have exposed the illegal promotion of unapproved, or ‘off-label,’ uses of drugs and devices, fostered in part by inappropriate industry ties to physicians. This has resulted in widespread harm to consumers. For instance, the illegal ‘off-label’ promotion of the epilepsy drug Neurontin resulted in 90 percent of its prescriptions being for unapproved uses. Promotion of unproven medical devices is also increasingly a problem. As a result, we asked CMS to require that payments related to ‘research’ on products that are actively being prescribed not be subject to any delay.

Finally, CMS proposed to require CEOs to personally attest to the accuracy of their company reports. We heartily agree with this requirement—accountability should be the bottom line for any company that produces the drugs that patients ingest or the devices implanted in a patient’s body.

– Marcia Hams, Director of Prescription Access and Quality, Community Catalyst
– Wells Wilkinson, Staff Attorney, Community Catalyst

For more see this post.

Gifts, big and small, can have an impact on how we feel and what we do. We all know it. When your co-worker unexpectedly gives you a holiday box of chocolates, you feel guilty and petty about snubbing him because he stole your stapler.

And no one knows more about using gifts to win people’s hearts than the drug industry. In what may be a surprise to many patients, the majority of doctors accept some kind of payment, gift, drug samples, meal, or other gift from the drug industry. These range from the free lunches delivered to their hard-working office staff, to hundreds of thousands of dollars in consulting or speaking fees. A 2009 survey found that 84 percent of doctors had some interaction with a drug company that involved payment, gifts, travel, consultancy or speaking fees, drug samples, or other reimbursements or payments.

While some exchanges, like samples or legitimate research are generally appropriate, other relationships are problematic. And some of these relationships have landed drug companies in hot water, leading to over seven billion dollars in settlements with the federal government over the last four years. For instance, Allegan, the manufacturer of Botox, created phony advisory boards “to reward hundreds of [the drug’]s top injectors,” according to a federal prosecution settled for $600M in 2010. How did 200 of these physicians ‘advise’ Allergan? By flying an oceanfront resort in Newport Beach, California in 2005 and 2006, and getting paid $1,500 to listen to presentations on unapproved, off-label uses of Botox. But Allergan is not alone. Forest labs paid doctors $1,000 for letting a salesman follow them around all day, while prompting the doctor to prescribe Forest’s anti-depressants Celexa and Lexapro. A Forest subsidiary pleaded guilty to one felony and two misdemeanors, and Forest paid the feds a $313 million settlement. Other examples  abound.

So last week,  the Centers for Medicare and Medicaid Services (CMS) gave patients, consumers, and others a different kind of gift – strong draft regulations on public disclosure and transparency of drug and device industry payments and gifts to doctors to implement the Physician Payments Sunshine Law, the ground-breaking transparency law passed in 2010 as part of the Affordable Care Act. This law will allow anyone to see when and how much their doctor is being paid or given gifts by the drug companies.

The scope of what drug companies must report – any “payment or transfer of value” – is  very broad, and will include nearly anything that has any value: a coffee mug, pens, dinner at a nice restaurant, or a big consulting contract. But the law allows for a number of exceptions: drug samples, educational materials for patients, and small items under $10 in value, so long as the total value in a calendar year doesn’t add up to more than $100.

But when a drug maker doesn’t make a payment directly and the money goes through a third party, to a doctor or hospital, what happens? 

Under the law, the payment is not reported if the drug manufacturer is unaware of the identity of the doctor or teaching hospital that receives the payment made indirectly via a third party. This is potentially a significant loophole that could encourage pharma to simply farm-out their gift-giving to marketing firms, etc. and attempt to sidestep the public transparency purpose of the law.

The good news is CMS wants to narrow this loophole as much as possible, and has proposed a strong standard to prevent the loophole from undermining the law. The draft rule has defined being “unaware” of a doctor’s identity to be when the manufacturer does not actually “know . . . the identity of the covered recipient,” so long as the manufacturer has not tried to act in “deliberate ignorance”  or “reckless disregard” of learning the identity doctors or hospitals that received payments from them via a third party. So a drug company cannot simply turn a blind eye to where their funds are being distributed by third parties.

CMS has further advised that if the names of the recipients are ‘publicly available,’ then the manufacturer is deemed to know the identity and must report these payments. Similarly, if an “agent” of the manufacturer, such as a staff member, employee, or paid consultant knows these identities, then the manufacturer must report.

How might this work? Well, if Pfizer paid a medical education company to pay for the travel and registration costs for all the cardiologists at a state university medical school, Pfizer would need to report these payments. Similarly, if Merck paid an event planner a lump sum that was intended to cover the travel costs of all the doctors presenting at a professional conference, Merck would need to report these transfers of value because the identities of these doctors would be publicly available, or would likely be easily available to conference attendees,

A recent blog by Daniel Carlat looks at how this will affect disclosure of industry payments to continuing medical education companies that then pay doctors to speak.

While there are a lot of details that must be worked out, CMS is setting the stage for broad transparency to bring the financial relationships to light. This is a nice year-end gift for patients, consumers, health plans, and advocates who are eager to know about and better understand the relationship that drugmakers have with their doctors and hospitals.

Wells Wilkinson, Director, Prescription Access Litigation project

Last week Community Catalyst and six California-based senior and consumer groups wrote to the California delegation of the U.S. House in support of a federal system to track the authenticity of prescription drugs.

The letter expressed support for the leadership of Reps. Bilbray (R-CA) and Matheson (D-UT) in sponsoring the Safeguarding America’s Pharmaceuticals Act of 2011 (H.R. 3026). The bill would protect patients from counterfeit and diverted drug products by establishing an FDA mandated national drug identification and tracking system. The letter was signed by the Gray Panthers (statewide and Berkeley-East Bay), the California Alliance of Retired Americans (CARA), Congress of California Seniors, CALPIRG, and CA Citizens for Health Freedom, as well as Community Catalyst.

Prescription drug counterfeiting has become one of the most lucrative crimes in the world. As such, there is no reason not to use modern technology to track the distribution of our vital medications and ensuring that the drug distribution system is secure. The network of businesses that move drugs from manufacturer to the patient is extremely complex, creating opportunities for highly profitable schemes to move stolen or counterfeit drugs into legitimate channels of distribution—and then to patients. These illicit products can be degraded, clinically dangerous, or ineffective, putting patients at risk. For example:

• Cancer and transplant patients were exposed to counterfeit Epogen and generic Procrit in 2002. Criminals netted a profit of $46M and more than 90,000 vials may have reached patients. This was exposed when some patients suffered painful side effects.
• Cancer, cholesterol and other drugs were bought from Medicaid patients on the streets of New York and resold to a wholesaler and then to pharmacies. Two men were convicted in 2008 for the $6.8M scheme.
• Thieves stole 129,000 bottles of insulin in 2009. Stored under unknown conditions, the temperature sensitive drug was sold back to pharmacies and ultimately to diabetics.
• Counterfeit Lipitor™ from Central America was illegally imported and sold into U.S. distribution in 2003.

Drug products move between large wholesalers, smaller wholesalers, large chain drugs stores or small pharmacies. While smaller wholesalers are required to maintain drug ‘pedigrees’ (paper or electronic transaction histories) under federal law, the larger “authorized distributors” of manufacturers are exempt. We need a uniform track and trace system to verify the history of all drugs, throughout each of the distribution channels.

This is of special significance to the state of California, which took the lead on the “pedigree” issue in 2004, when it passed legislation spearheaded by the Board of Pharmacy, CA senior groups and Health System Pharmacists. But the implementation of a state tracking and authentication system was delayed until 2015-17 by subsequent legislation, in order to allow the federal government to create one uniform national system.

Since then, 28 other states have also passed some form of drug pedigree law, but varying provisions make industry compliance complicated and open to abuse. Comprehensive federal legislation like the Safeguarding America’s Pharmaceuticals Act of 2011 (H.R. 3026) would ensure consistency, as well as meet the California legislature’s deadline and goals.

H.R. 3026 would:

• Require manufacturers to place a unique identification number on each package of drugs (the smallest salable unit) bought and sold in the United States.
• Establish an electronic tracking system to allow companies to verify the authenticity of the drugs they buy and sell, and requiring every entity that receives a drug during distribution to perform such authentication.
• Strengthen national guidelines for state wholesaler licensure standards.

Eight years ago, Cesar Arias, a pharmacist and drug inspector for the state of Florida, told congressional investigators:

“No patient in the nation can know with 100 percent certainty that the drugs they are getting are what they are purported to be — or if they are, that they have not been in the trunk of someone’s car, or sitting in a hot warehouse or a crack house in South Florida .”

It is well past time to heed his warning.

– Marcia Hams, Prescription Access and Quality &
Wells Wilkinson, Prescription Access Litigation

Yesterday, the Massachusetts Attorney-General’s office announced a $24 million dollar settlement resulting from an investigation of pricing fraud in state programs by fourteen different drug makers. This settlement follows a ground-breaking national settlement of a lawsuit filed by the Prescription Access Litigation project at Community Catalyst in 2001, with Health Care For All, Mass Senior Action, MassPIRG and eleven other consumer groups nationwide representing the interests of consumers.

Drug industry pricing fraud became widespread in the mid-1990s, when high but fictitious list prices were used as an incentive to sell products. Doctors or pharmacies made more money using a drug whose actual cost was far less than the amount they were paid by Medicare and Medicaid. This fraud led to our class action lawsuit and a ground-breaking 2007 trial on behalf of Massachusetts consumers and private sector insurers. It was found that AstraZeneca, Bristol-Myers Squibb and Warrick (a subsidiary of Schering-Plough, which was bought by Merck in 2009) had violated consumer protection laws through their deceptive pricing tactics. This victory ultimately convinced 28 different drugmakers to pay over $360 million to settle claims with the private sector health plans and consumers. (See more here.)

And now, on behalf of public programs here in Massachusetts, the Attorney-General has recovered funds from a number of these companies for the same kind of unfair and deceptive pricing. For example, manufacturer Warrick sold an albuterol drug from 1995 to 2003, all the while reporting a list price that was nearly seven-times the actual sales price. The State’s trial in 2010 found that Warrick had cost Massachusetts $4,563,328, and had made 28 false statements in violation of the state’s False Claims Act. After treble damages, 12 percent interest, and legal fees, a $24 million settlement looked like a good deal to Warwick’s new owner, Merck.

How can Massachusetts better protect its public programs from deceptive pricing in the future?

Currently, Massachusetts uses industry-published list prices as a basis to reimburse pharmacies. One option is to adopt the Average Acquisition Cost (AAC) method of paying pharmacies for the drugs MassHealth purchases for its members. The AAC method does not use easily manipulated manufacturer “list” prices (at issue in the court case). Instead, pharmacies are paid based on their actual cost of acquiring the drug from the manufacturer, plus a dispensing fee, thereby reducing overpayment and saving money for MassHealth. This evidence-based pricing method has been adopted by Alabama and Oregon, and it has been recommended by Medicaid headquarters in Washington D.C. And like Alabama and Oregon, Massachusetts could make these regularly-audited drug prices available to the public, so that private insurance plans could also adopt this method and save money, hopefully reducing premium costs. Community Catalyst describes more about AAC in its new Medicaid Report Card.

– Wells Wilkinson, Director, Prescription Access Litigaton, and
Marcia Hams, Director of Prescription Access and Quality, Community Catalyst

Yesterday, CMS started to make up for lost time when it issued the draft regulations on the Sunshine law in the Affordable Care Act. This new law requires manufacturers of drugs, medical devices (e.g. stents, replacement knees etc), and biologics to report all payments they make to doctors and teaching hospitals to HHS, which must disclose these payments in a publicly available, on-line searchable database.

In response, Senators Grassley and Kohl cancelled a hearing to explore why CMS had missed an earlier deadline and thus delayed the start of the new transparency program. This was of concern to both consumer advocates eager that these payments become public, and to industry representatives who are concerned about how to comply with the transparency law starting next year.

The delayed release of the new draft rules does mean that industry will not have to record or report payments that are made before the final version of the rule enters into effect, likely no earlier than April or May of next year. CMS is accepting public comment on the draft rules until Feb. 17, 2012. But CMS is standing by the law’s required September, 2013 deadline for disclosing to the public any 2012 payments that are made after the rule is final.

While we are disappointed that the first public transparency reports may not have a full year’s data, we think it is more important to allow CMS adequate time to ensure that the final regulations are as strong and effective as possible. From our point of view, good regulations will help ensure that industry reports payments fully and precisely, so that patients, the public and CMS itself can best understand what these payments are for, and evaluate whether a payment is appropriate.

One highlight of the draft rule was how CMS captured the purpose of the law’s new public transparency program. CMS states that, while industry collaboration can be beneficial, “payments to physicians and teaching hospitals can also introduce conflicts of interest that may influence research, education and clinical decision making in ways that compromise clinical integrity and patient care, and may lead to increased health care costs.”

The on-line database of industry payments, to be made publicly available by Sept. 30, 2013, will include the name and identifying information for the manufacturer making the payment, the doctor or teaching hospital receiving it, the amount of each payment, the drug or device associated with the payment or “transfer of value”, and the form and “nature” of the payment. We were pleased that CMS proposed broadly inclusive definitions of manufacturers, their subsidiaries, and third parties who may make payments on their behalf, although CMS has asked for comment on this definition.

The draft rule also proposed that the categories of payments should be distinct from one another to ensure the utility of the information to patients, to researchers and the public. However, we do have concerns that the final rule will not honor that intent if it does not provide clear definitions on how the categories (such as education, gifts, consulting, etc.) differ from one another. The draft rule as it stands now leaves out clear and specific definitions, which would open the door to varying interpretations by each company, a problem we have already seen in the public disclosures required under court settlements. This results in data that is inconsistent, confusing, and not useful to the public.

Overall the CMS framework is solid and reflects the spirit and intent of the Sunshine law, which was supported not only by consumers but by leaders in the medical profession, the Institute of Medicine, MedPac, and many in industry.

The draft regulations include many thoughtful discussions of reporting issues and invite further comment on many of them— a clear opportunity for consumer advocates concerned about the drug industry’s abuse of financial incentives to doctors or teaching hospitals. We will be submitting our recommendations to address this issue and hope others will as well.

– Marcia Hams, Director of Prescription Access and Quality &
Wells Wilkinson, Staff Attorney

Recently, the Government Accountability Office published a report entitled, “Food and Drug Administration: Better Coordination Could Enhance Efforts to Address Economic Adulteration and Protect Public Health.”

The report describes economic adulteration as follows:

“Economic adulteration is not a new problem and ranges from simple actions, such as adding material to increase a product’s weight, to more sophisticated substitutions or additions that are designed to avoid detection by tests known to be used to authenticate ingredients or products. Economic adulteration differs from other forms of intentional adulteration, such as bioterrorism or sabotage, whose primary purpose is to cause harm.”

Once again, the heparin scandal, the poster child for the vulnerability of the U.S. drug supply, is cited in the report as a prime example of economic adulteration. In 2007-2008, heparin was discovered to contain over-sulfated chondroitin sulfate, a toxic contaminant that mimics heparin. The contamination was evidently economically motivated, and was linked to a number of serious allergic reactions and deaths in the U.S.

Economic adulteration is distinguishable from unintentional violations of current Good Manufacturing Practices, which can also cause a drug to be adulterated. For example, we have seen cases where drugs have been mislabeled, made too strong or too weak, or contaminated with microorganisms, but those problems were a result of poor manufacturing practices, not intentional adulteration with an economic motive. (See, e.g., GlaxoSmithKline statement about its failure to follow cGMP.)

According to the new GAO report, FDA officials and stakeholders cited two main challenges to addressing economic adulteration. The first:

“Globalization has led to an increase in the variety, complexity, and volume of imported food and drugs, which complicates FDA’s task of ensuring their safety. In addition to globalization, an increase in supply chain complexity—the growth in the networks of handlers, suppliers, and middlemen—also complicates FDA’s task.”

This is not the first time globalization has been identified as a problem, but it is a reminder for Congress and the Administration of the challenges facing FDA.

The second problem identified in the report was lack of information from industry. Here, there are two main issues. First, because companies regularly test ingredients from suppliers, they have information on potential adulterations that would be useful to the FDA. However, industry is reluctant to share that information when it does not have to (such as when an adulterated ingredient has entered into commerce) because of fears of exposing themselves to litigation for accusing a supplier of intentionally adulterating products if their findings turn out to be erroneous. Second, FDA would benefit if industry would share more information about what substances might be used to adulterate products. Companies develop tests to monitor products they receive from their suppliers but often are reluctant to share the information with the government because it is proprietary.

These accounts in the report highlight the necessity of involving industry in any solutions to our drug supply safety problems. Fortunately, we have seen a lot of industry support for improving the safety of the drug supply (including the generic industry’s recent agreement with the FDA to pay user fees), and hope the collaborations can continue to improve, as both industry and government will succeed only if they keep the consumer and patient’s safety as the highest priority. But in order to combat economic adulteration (and other forms of drug contamination) and protect the food and drug supply of the U.S., the FDA needs to have the tools and resources necessary to deal with these 21st century concerns.

Additional coverage of the report is available at:

• Pharmalot
• FDA Law Blog
• In-Pharma Technologist

– Anna Dunbar-Hester, Policy Analyst

Late yesterday, thirty advocacy organizations, representing seniors, labor, providers, patient safety advocates, cancer patients, and consumers joined Community Catalyst in calling for Congressional action to improve the safety of drug manufacturing.  In letters to the Senate HELP and House Energy and Commerce committees, groups urged Congress to make safe drug manufacturing legislation a priority by including new patient safeguards “in the upcoming reauthorization of the Prescription Drug User Fee Authorization Act (PDUFA).” 

Signed by advocacy groups from across the nation and in districts of some key Energy and Commerce committee members, the letters warns that the many recent drug recalls, failed inspections, and manufacturing quality breakdowns by both brand-name and generic manufacturers are likely just “the tip of the iceberg” because most manufacturing problems at overseas facilities go unseen.

The high profile manufacturing problems by Johnson and Johnson, GlaxoSmithKline, and other facilities were discovered primarily by FDA visits to the 2,500 domestic drug manufacturing plants, which are inspected once every two and a half years.  But the number of foreign drug manufacturers has doubled in the last seven years, encompassing approximately 3,800 foreign manufacturers in more than 150 countries.  

This rapid globalization of overseas drug manufacturing has far outstripped the FDA’s capacity to inspect these new facilities, which today are the source of 40 percent of finished drug products taken in the U.S., and 80 percent of active drug ingredients and bulk chemicals used to make drugs domestically.  According to the GAO, under current resources, the FDA can inspect these 3,800 foreign sites only once every nine years.

The letters show that these risks are real, serious, and potentially lethal for vulnerable patients. For instance, the intentional contamination of heparin tragically led to numerous deaths and hundreds of adverse reactions amongst the hundreds of thousands of dialysis or post-operative patients treated with Heparin each year.

We also noted how these risks are not floating under the radar, but are widely known by industry leaders. A 2010 poll of pharmaceutical executives identified “raw materials imported from outside the U.S. as the greatest vulnerability” to the purity and integrity of drug products in the next five years. But progress has been made. Our letter commends how the generic drug industry has “stepped up to the plate” by “agreeing to fund inspections with user fees….” See here and here.

Reform is also widely supported by voters from across the political spectrum. In fact “81 percent of Republicans, 87 percent of Independents, and 97 percent of Democrats support increased FDA authority to issue recalls, destroy contaminated products upon import, and inspect foreign manufacturers” according to a recent poll.

The letter asks Congress to provide FDA with new authority to adequately protect US patients from the increasing risks of counterfeit drugs, a leading black-market enterprise around the world. This would include the ability to issue a recall, or to destroy contaminated, expired, or unsafely manufactured drug products that are seized at the border.

Yesterday, Rep. Michael Burgess, vice chairman of the House Energy and Commerce Subcommittee on Health, announced that reforms to end drug shortages would be included in legislation to renew the system of collecting fees from drug-makers in order to fund FDA review of new drug products. We support efforts to eliminate drug shortages, and improvements to drug manufacturing quality would certainly help. According to the FDA, manufacturing problems were the cause of over half of the drug shortages in 2010. And these problems can be quite serious, with sterile drugs found to be contaminated with “glass shards, metal filings, and fungal or other contamination” according to an FDA report last month. 

Thanks to our partners who joined us in calling for increased safety of drug manufacturing: 

Action for Boston Community Development (ABCD)
AFSCME
Alliance for Retired Americans
Breast Cancer Action
California Alliance for Retired Americans (CARA)
Center for Medical Consumers
Community Catalyst
Connecticut Center for Patient Safety
Consumers Union
Families USA
Florida CHAIN
Health Law Advocates of Louisiana, Inc.
Illinois Public Interest Research Group (Illinois PIRG)
Medicare Rights Center
Mississippi Human Services Coalition
Missouri Alliance for Retired Americans
National Education Association (NEA)
National Labor Alliance of Health Care Coalitions
National Physicians Alliance
National Research Center for Women & Families / Cancer Prevention and Treatment Fund.
National Women’s Health Network
New Hampshire Alliance for Retired Americans
North Carolina Justice Center’s Health Access Coalition
Ohio Alliance for Retired Americans
Pennsylvania Public Interest Research Group (PennPIRG)
TeamstersCare  – Teamsters Union 25 Health Services & Insurance Plan
Texas Alliance for Retired Americans
UHCAN Ohio
USAction
USPirg
Vermont Public Interest Research Group (VPIRG)